Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Hansard source

I am pleased to respond to this ministerial statement by the Minister for Trade, which is very similar in style and content to his statement at the beginning of last week where he dealt with a range of trade issues and referred also to the ASEAN-Australia-New Zealand Free Trade Agreement. Today that agreement has taken a step further, with the text, at long last, being made available for some degree of public scrutiny. I thought it was quite unusual for the text of this agreement to be kept secret for such a long time. Indeed, even after the minister had announced that he had signed this agreement, the text was not available. I do not think that that is an accountable and open way in which to deal with these sorts of agreements.

I appreciate that there will now be a time to look at the text and, presumably, there will be the usual inquiry from the Joint Standing Committee on Treaties, so people will have an opportunity to be involved. But the level of consultation about the detail of these particular discussions has not been of a similar nature to what occurred in the discussions, for instance, about the Doha Round or in other trade negotiations that have occurred over the years. It is widely believed that there were some very difficult issues—and I think the minister has confirmed this today—in relation to the motor vehicle industry, and probably the clothing, textile and footwear industry, which had not been agreed at the time when the initial signing actually occurred. Again, that seems to me to be a rather unusual way to do business, that critical issues are left unresolved and yet we have already agreed to the document. I think questions could reasonably be asked during the Joint Standing Committee on Treaties review of this particular agreement about some of the processes that were involved.

As I said last week, trade and trade policy is generally reasonably bipartisan. I welcome the fact that another step has been taken in Australia’s trade negotiations and that a further free trade agreement has been signed. As the minister said, this one is a plurilateral agreement in that it involves a number of countries and therefore is an important building block in a comprehensive program of free trade agreements involving Australia and our major trading partners.

However, it does grate a little when the minister, in discussing the history of this matter, chose to accentuate the role of Labor Party people—naturally, I suppose, coming from his side of politics—in the development of this process and to write out of the history some of what actually happened when Labor was not in office. It is important to note in this particular agreement that the informal consultations in 1995 in Brunei, to which the minister referred, between ministers from ASEAN, Australia and New Zealand agreed to region-to-region linkages between AFTA and CER. That was probably the first time that there was any kind of genuine willingness on behalf of the partners to actually talk about some kind of a free trade agreement. Prior to that, there had certainly been some engagement and discussions and at one stage the Deputy Prime Minister of Thailand, Dr Supachai, made some supporting comments. But under the previous government it took many years—more than a decade—to get to a stage where there was some willingness to actually talk about region-to-region linkages.

It was in October 1999, under the coalition government, that ASEAN and Australia and New Zealand ministers established a high-level task force to examine the feasibility of an AFTA-CER free trade area. In October 2000, The Angkor agenda: report of the high-level task force on the AFTA-CER free trade area supported the establishment of an AFTA-CER free trade agreement. In September 2002, AFTA-CER Closer Economic Partnership was established. In November 2004, leaders from the 10 ASEAN countries, Australia and New Zealand agreed in Laos to launch negotiations on a comprehensive FTA covering goods and services as well as investment. In March 2005, the AANZFTA negotiations began in Manila. Since then, there have been 16 rounds of negotiations. Most were under the previous government but were taken up seamlessly by the incoming government.

I insert those parts of the history of this agreement so the record can be full and complete. I think any fair-minded observer would acknowledge that there was a very substantial contribution to the negotiation of this agreement by the previous government. The minister has come along at the right time to complete and sign the agreement. I cannot say that if the previous government had been in office we would have signed the same agreement, because I think we would have had different priorities. I would strongly dispute what the minister says about ambition and about Labor having greater ambition in trade. In fact, I think this example is a triumph of expediency over ambition. A mere achievement of preventing backsliding is now seen as worthy of honour. Rather than making new advances, we are supposed to be now thankful that the agreement is not going backwards. In fact, there has been a contribution from both sides, but I want to concentrate my remarks on the actual content of this agreement.

I want to make one final comment about something which, I have to say, does concern me. I am concerned in relation to the fair reporting of the history of events. The Department of Foreign Affairs and Trade seems to currently be going through a process of rewriting its country briefs, writing out references to the coalition government in these particular briefings. There is a 12-year gap starting to appear in the history of the arrangements between one country and another; that no minister has visited during that time. There were no discussions. Their ministers did not come to Australia. There is just a 12-year gap. I think that is unfortunate, because DFAT has tried very hard to give bipartisan service to the government of the day. History does not stop because there is a change of government; it goes on. The written record, therefore, should not be purged of references to the achievements of the previous government. I call on the government to stop this process and make sure that the records provided and the history in the department’s records remain honest, true and a fair assessment of what happens and that they do not just get rewritten because there is a change of government.

As I mentioned earlier, there are clearly some advances in the ASEAN-Australia-New Zealand Free Trade Agreement. But I think it falls well short of what could be considered a good deal for Australian industry. Indeed, I think Australia has given away more than it will receive in return. Under the agreement, Australia has agreed to reduce 96.4 per cent of its tariffs to zero at the beginning of next year. That compares with 47.6 per cent which were at zero in the base year. Of the 12 countries that are party to the agreement, only Singapore will have lower tariffs in 2010. Of course, Singapore has a range of other restrictions on trade with Australia, particularly in services—which is the main area of its economy and which will not be changed as a result of this agreement—which places barriers in the way of a free and proper exchange of trade and commerce between our two countries. Singapore does not have a range of sensitive industries, apart from services—and, as the minister said, the previous government negotiated a free trade agreement with Singapore which is exceptionally comprehensive. There are a lot of zero rates there. But, in some of the key areas, like services, Singapore does need to improve its record, and this agreement makes no progress in that regard.

Under the arrangements that have been negotiated, three countries will have less than five per cent of their tariffs reduced to zero by 2010. One country—I admit it is only a small country: Laos—will have none there even by 2013. Burma actually seems to slip back; it has less tariff-free treatment of items in 2013 than it had in the base year of 2005. Cambodia makes no headway. Vietnam makes no headway at all between now and 2013. And yet Australia moves 96.4 per cent of all of our tariff items to zero on day one. Even New Zealand will only reach 84.7 per cent of its items moving to zero by 2010. It is of interest to note that in 2013 around 10 per cent of the New Zealand items will still not have been reduced to zero. So we are making substantial concessions immediately, where other countries are trailing along at a much slower rate. Sometime between 2020 and 2025 most tariffs will be eliminated for some key Australian industry sectors; but, for others, they will never be removed. In some, they will not even be improved as a result of this agreement.

From the first day of AANZFTA, all Australian tariffs on agricultural imports will be reduced to zero permanently. All agricultural items coming into this country will have no tariff protection whatsoever, and that zero rating will be locked in permanently. On the other hand, Australian farmers will continue to face major tariff barriers when they seek to export agricultural products to ASEAN countries. So Australia’s very generous ultimate offer in relation to the full range of agricultural products—we have emptied the whole larder—on day one is not being reciprocated by other countries.

It is also interesting to note the double standards in this agreement. While agriculture has to have zero tariff rates from day one, certain other industries will have only tit-for-tat style tariff reductions—particularly motor vehicles, clothing, textiles and footwear, and a range of other manufactured goods. In many of these industries, Australia will reduce its tariff protection in a similar style to what is happening in other countries. I notice that the minister said in his address that negotiations in this sector—referring to the car industry sector—were tough and that he fought for the best interests of the local Australian car industry. He picks out the car industry as the one for which he fought tough and in the best interests of the local industry. I would have hoped he would have fought for industries other than the car industry. What fight did he put up for the agricultural industry? He immediately reduced all tariffs to zero.

He went on to say that, as a result of the negotiations, there will be a slower phase-out of arrangements for tariffs on vehicles manufactured in Indonesia, Malaysia and Thailand, as we demanded reciprocal arrangements with those countries. It is perfectly reasonable to demand reciprocal arrangements, but when it came to agriculture there were no such demands. He did not seek any kind of reciprocal response from those countries at all. We just unilaterally disarmed—zero on day one.

In other areas, such as the services area, this will be a major disappointment for Australia’s growing services exporters. This is a very large proportion of the Australian economy—an area where we are making significant advances, and the ASEAN countries are key markets. Yet the gains in the services sector are paltry to say the least. I know that that reflects the position with the Doha Round and discussions in relation to services generally. It is very hard to make headway. But since we decided to unilaterally disarm in sectors where Australia is strong, like agriculture, it is disappointing that we are unable to achieve some gains for our services sector.

As I mentioned earlier, many key products will receive little or no improved access, especially in the agricultural sector. Rice has been excluded from any tariff reduction commitments or improved market access offers by Indonesia, Malaysia and the Philippines. Maize has been excluded from the tariff commitments by Indonesia. Indonesia and Malaysia have excluded wine and spirits. Vietnam has excluded 41 mineral lines from tariff commitments. Malaysia will continue to restrict access of Australian milk. There is one product I would like to mention in particular. The Australian fruit industry placed a high priority on the access of mandarines into Indonesia. Once much of the export mandarine industry was in my own electorate. The growing areas are not in my electorate anymore, but the exports have largely stopped anyway because of the high tariffs imposed by Indonesia on Australian mandarine imports. Even though this was probably the highest priority for the Australian fruit industry, there will be no reductions in citrus tariffs into Indonesia until at least 2025 and probably until 2028. At that time, there will be only a 6.4 per cent reduction in the existing tariff. So the barriers are going to remain in place for citrus into Indonesia for another generation.

Let us turn to sugar, which the minister spoke about at some length. ASEAN countries take about a third of Australia’s exports in the sugar industry, so it is particularly important for them. The minister was a constant critic when trade agreements negotiated by the previous government did not make enough advances in sugar. He referred to that again today. After the negotiation of the US-Australia FTA in March 2005, the minister said, ‘We cannot allow that sort of thing to happen again.’ The minister raised the issue again in May last year, when he said, ‘Unlike the previous government, we are not selling out Australian agriculture to pursue an FTA at any cost.’ In reality, the minister has failed on his own rhetoric in relation to sugar. There is little or nothing in this deal for sugar. Most of the signatories to AANZFTA have made no concessions at all on sugar. Some have got an existing zero tariff, and we are supposed to be thankful that they are going to keep it at zero. Where concessions have been made, they are from the smallest ASEAN countries and most of these improvements will have to wait until 2023 to be delivered.

Indonesia, the Philippines and Thailand have said that they will do absolutely nothing. In fact, Thailand has actually delivered much more for sugar under the Thailand-Australia FTA, negotiated by the previous government, than has been arranged in this deal negotiated by the minister. Thailand is actually offering less under this agreement than it previously agreed to provide. I think, therefore, that any achievements that the minister may boast about in relation to sugar are threadbare. He could not even keep in place an arrangement that was already negotiated and already signed. If we are supposed to take credit for no retreat in relation to a free trade agreement, maybe we should be taking credit for the fact that there was no retreat on sugar in the AUSFTA. Let me say that I did not regard that as a good enough outcome. I wanted advances on sugar in the Australia-US Free Trade Agreement, but this minister, who was critical of that outcome, is asking us to be satisfied with a ‘no retreat’ type of solution concerning most of the countries involved in the agreement he has just completed. The reality is that this was not a good deal for sugar growers. There are virtually no advances whatsoever. There may be a little, if they can hang on until 2023, into some very small markets, but in reality sugar has proved to be too hard for this government to include in the negotiations.

If the minister had agreed to be tough and to fight for the best interests of the local industry, as he did for the car industry, he might have been able to achieve something worth while. Maybe if he had agreed to slower phase-out arrangements for some other tariffs in relation to other countries in return for reciprocal arrangements, he could have achieved something. But the priority for this government was with its mates in the car industry, not the Australian farm sector. I guess this really worries the agricultural sector when it comes to the Doha Round. I can hope that there is more ambition and more determination in the Doha Round and that we will not simply accept another argument that we should be satisfied with not going backwards. That is not good enough. Not going backwards is not a reason for us to celebrate. What we have to do, if we are going to have worthwhile negotiations, is to go forward and continue to go forward.

How ambition has fallen. The government regularly uses words like ‘ambitious’ around their trade agenda, but in reality the ambition has now retreated to a situation where all they expect to achieve is that we have not gone backwards. You do not create more jobs by not going backwards. You have to go forwards. You have to achieve greater gains, and these have not been achieved in far too many areas of this agreement.

Can I also raise some concerns I have about the new rules of origin that have been included in this FTA. Exporters are going to be able to choose whether they want a regional value content or a change of tariff classification content under the origin rule. This flexibility will enable a much wider range of products to be classified as coming from that country of origin and be allowed to be imported into Australia to take advantage of the new tariff concessions. Some products that are predominantly grown or made in other non-ASEAN countries will be able to get the benefit of this free trade agreement. To provide this additional flexibility will mean that there is a much wider range of products that will be allowed to be classified as made in Thailand, made in Indonesia or made in Burma than has ever been the case in the past, and has ever been the case in previous agreements. I suspect, also, that that is going to be something that will benefit our trading partners coming into a large consumer market like Australia more than it will benefit Australia in seeking to place our products in ASEAN countries.

The AANZFTA will certainly deliver some benefits to Australian industry and there will be some new market access opportunities, but it is also going to expose a number of Australian industries to much tougher Asian competition. In that regard, I turn to my concerns about the future of the Australian Export Market Development Grants Scheme, which is falling apart under this government. The scheme is unravelling; it has virtually collapsed. There are hundreds and hundreds of people who have undertaken negotiations to export products from Australia to around the world who are now finding that they are not going to have their EMD grants paid. At the last election, the Labor Party went to the people with a promise to expand the scheme to make a lot more people eligible—lower the thresholds, increase the number of grants and substantially extend the grants.

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